Robot-assisted surgeries have become increasingly popular over the past decade. Many hospitals in the United States have acquired robotic surgical systems and more are considering purchasing this equipment. The price of such machines can be up to $2.5 million. Given such high acquisition costs, it is important to study how the diffusion of this new technology affects the U.S. healthcare system. Using a unique database we compiled for hospitals in California, we will employ state-of-the-art econometric methods to address the following specific aims: 1: To examine hospital and market characteristics associated with hospitals' decision to acquire a robotic surgical system. 2: To explore how the acquisition of robotic surgical system affect the flow and cost of surgeries among hospitals within the same market as well as across markets with varying capacity of robotic surgeries. 3: To evaluate how the purchase of robotic surgical machines affects the financial performance in terms of operating expenses and revenue of hospitals. Findings from this study will inform policy makers how the proliferation of robotic systems affects surgical practice and costs in hospital settings and can also help decision makers at hospitals make more rational decision regarding whether to purchase robotic surgical systems.